JERUSALEM, Jan 21 (Reuters) - Israel has agreed to upgrade
to university status a college built in a Jewish settlement in
the West Bank, a move critics see as placing another obstacle in
the path of US-backed efforts to resume stalled peace talks.

The decision by Defence Minister Ehud Barak formalised a
2005 cabinet ruling to that effect but also coincided with the
latest visit to the region by US peace envoy George Mitchell
for talks with Israeli and Palestinian leaders.

Palestinian peace negotiator Saeb Erekat told Reuters that
establishing a full Israeli university in land near Nablus that
Palestinians want for their state was part of the same policy
of dictation rather than negotiation.

Every time Senator Mitchell comes to the region, they greet
him with such policies, Erekat added.

A statement from Barak's office confirmed that on Wednesday
he had given his authorisation for the Ariel College to become
a university centre, a process that would be completed only
once a separate academic panel gave its authorisation.

The college of more than 8,000 students was built in the
1980s in one of the biggest Jewish settlements on land occupied
since the Arab-Israeli war of 1967.

Barak's decision would help the college obtain academic
credentials that would enable it to expand research and increase
its student body to some 20,000 in the next decade, said Rinat
Saguy, a spokeswoman for Ariel College.

We are glad he has granted the permission, she added.

CRITICS

Israel says it plans to keep the Ariel settlement under any
peace deal that creates a Palestinians state. Even Palestinian
leaders acknowledge such settlements could be annexed by Israel
in return for a Palestinian state getting more land elsewhere.

But critics of the college upgrade said the move created
facts on the ground that may further complicate already delayed
negotiations that have yet to produce any deal that would give
Palestinians sovereignty in the West Bank.

Left-wing Israeli academics protested that a new university
would siphon away funds earmarked for other educational
institutions and possibly hurt their relations with foreign
academics, especially in Europe, where university groups have
threatened to boycott Israel in the past over settlement policy.

Uri Avnery, a former Israeli lawmaker and veteran left-wing
critic of settlements, said Barak had granted legitimacy to all
those in the world who call to boycott Israeli universities.

Neve Gordon, a political scientist at Ben-Gurion University
and member of a group that sought a court order to cancel the
Ariel College decision, called it another instance of Israel
deepening its roots in the West Bank.

You create facts on the ground, then say we can't return
these areas. It's a part of the old wall-and-tower approach to
building settlements, Gordon told Reuters in a reference to the
Zionist strategy of building outposts to claim territory.

He also criticised Barak personally, saying he was ignoring
his own left-wing Labour party's past commitments to a deal on
Palestinian statehood: I thought Barak was for a two-state
solution, Gordon said. But apparently he is not.
(Additional reporting by Tom Perry in Ramallah; editing by
Alastair Macdonald and Paul Taylor)
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